COVER STORY
Partnering with a Purpose:
DOES YOUR COMPANY PASS
THE STRATEGIC READINESS EXAM?
n this day and age of corporate downsizing
or rightsizing, call it what you will, there is a
significant by-product that is being created
within all organizations. The corporate “skill
set” is being diluted and there are fewer and
fewer resources to call upon internally to get the
job done. When you couple this situation with
the current economic conditions, it only serves
to make new business development a more
difficult task than ever before.
If this sets the stage for business today in
corporate America, what are our options for
effective business development and what are we
really capable of accomplishing? The
well-managed organization will call upon their
key employees and management to do “more
with less”, but is that the answer? We contend
that doing “more with less” and having
stretch objectives is only part of the
answer; the rest of the answer lies in
taking a look in the mirror and
conducting a corporate self analysis in
terms of goals, objectives, mission,
By Dave Koester
I
President & CEO,
The Linkage Group, LLC
The Koester Group, LLC
and Greg Werner
Vice President & COO,
The Linkage Group, LLC
PARTNERING
vision and what is realistically possible. This
process is not easy and even the best of
companies would prefer to look outside of the
organization rather than take a hard look at
themselves. Whether it’s the competition or
comparable industries, it’s always easier to look
outside!
As we consider our options today, one that
routinely comes up in virtually every senior
management meeting is strategic partnering or
building a business alliance relationship with a
similar company. Our research and experience
indicates that there are many informal
partnering relationships that exist on a “hand
shake”, but the structure of these relationships
is usually taken for granted and very seldom
understood
throughout
the
entire
PURPOSE TAKES
COMMITMENT, UNDERSTANDING, A WILLINGNESS TO
LOOK IN THE MIRROR…AND THE ABILITY TO
EMBRACE
WITH
NEW
A
BUSINESS
DEVELOPMENT
OPPORTUNITIES IN A NON-TRADITIONAL FASHION.
Issue Sponsored by:
Miller Heiman / IMPAX
••14••
VELOCITY™ Q4 2002
organization, especially by senior
management. We have often found that
what many companies consider to be a
strategic partnering arrangement simply
exists at a middle management level and
is only accessed by a few people within
the company. One must question the
true value of any such relationship and
then ask the question; how can we
embrace “Partnering with a Purpose” and
work this relationship vertically within
both organizations?
Partnering with a Purpose takes
commitment,
understanding,
a
willingness to look in the mirror and
perhaps most significantly, the ability to
embrace new business development
opportunities in a non-traditional
fashion. Sound difficult? Well it is and it
will challenge the very core, history,
culture and methodology of even the
best-managed organizations for it’s all
about change and opening
your organization to
another in the true spirit of
partnering. The results of
an effective, well-structured
strategic partnering model
can
translate
into
significant gains for both
organizations, but it does
not
come
without
recognizing that both
companies must be willing
to embrace change and
trust one another with no
hidden agendas. Otherwise
the partnership is doomed
to failure!
Along with the natural expectations
for additional penetration of existing
accounts and the initiation and
development of new accounts, you have
been asked to investigate and implement
a strategic partnering initiative on behalf
of your company.
Thinking about who you do business
with today, coupled with scanning the
SAMA library leads and white papers,
you find many helpful articles written by
consultants and practitioners on the
subject of strategic partnering. After
reading many of them, you are convinced
that a properly conceived and
implemented strategic alliance initiative
can produce the results that are expected
of you by management. But now for the
$64,000 question: Where do I start, how
do I start and with whom do I get
involved? We would encourage you to
ask yourself at this time, how would you
road ahead of you? There is a high rate of
failure in the implementation of strategic
alliances. There are many reasons why
strategic alliances fail. At the end of the
day, however, all of the reasons can be
traced back to one overriding cause: lack
of organizational readiness. Strategic
partnering takes a basic set of individual
competencies
and
organizational
processes and elevates them to a high
level. In a perfect world, all of these
factors would be in place at your
company, just waiting for you to put
them into motion. But are they? The
likely answer is “No”.
Partnering Reality
Without a doubt, the popularity of
business
alliances
and
strategic
partnerships today is higher than ever
before, but this fact must also be
tempered by the harsh
reality that 9 out of every 10
partnerships
that
are
developed fail! This is a
staggering statistic, but only
proves to reinforce the
point that if you are going
to expend the effort to
create a formal strategic
business alliance, you had
better take the time to make
the right moves and take
the right steps!
One of the basic reasons
why strategic partnerships
seem to be so much in
vogue today is the simple
fact that companies think of these
A Real Life Example
HE HARSH REALITY IS THAT OUT relationships as an avenue for “quick
hits” or “low hanging fruit”,
PARTNERSHIPS THAT particularly given the fact that their
OF EVERY
Consider the following very
typical example of a sales performance
own resources have been cut back
ARE DEVELOPED FAIL
review with your manager: Your most
and restrained. We have all heard
recent annual performance meeting with handle this situation and who in your these expressions before and they
your boss has gone extremely well. Sales organization would you call upon for couldn’t be further from the truth.
are ahead of plan and generally up across direction, support and assistance?
We have already addressed the fact
At this point, it is natural to want to that 9 out of every 10 new business
the board with each of your strategic
accounts. You’ve earned and received an charge ahead into the implementation partnerships or alliances that are formed
improved pay structure as well as phase of your initiative. After all, results today fail. There are some key reasons for
some
additional
responsibilities. are what count. Wouldn’t it be a benefit, this failure rate and when these reasons
Remember—“doing more with less” though, to learn from the mistakes of the are fully understood they can become
professionals who have been down the your blueprint for successful strategic
is expected.
T
9
10
!
Issue Sponsored by:
Miller Heiman / IMPAX
••15••
VELOCITY™ Q4 2002
partnering or your “Strategic Partnering
Readiness Exam”. Are you and your
company ready to take the test? This
exam is based on compiling and
categorizing the results of both
successful and failed partnering
initiatives. It will point out the key
reasons why some alliances fail, and give
you
the
concrete
steps
that
will improve the readiness of your team
and increase your odds of success.
The Strategic Partnering Readiness Exam
Question 1: Does your Senior
Management team embrace a common
understanding of the definition of
Strategic Partnering and its expected
results and more importantly, are they
willing to get involved in the
process? If the CEO views
partnering as a key component
for international expansion and
is willing to wait a reasonable
amount of time for the
partnership to become profitable,
but the CFO is pressuring the VP
of sales to achieve some
profitable “quick hits” in the next
quarter, you have all of the
makings of a failed initiative.
Your job as the champion is to
make sure that all of the key
decision-makers
agree
on
expectations
before
the
initiative begins.
Question 2: The “trust
imperative” question. Can your
company, once the proper
non-disclosure and confidentiality
agreements are in place really
operate with a true trust imperative? This
means operating with no hidden agendas
and a full and complete sharing of all
corporate information, including P&L
statements, corporate processes and
competitive intelligence. Trust is one of
the key corporate competencies that will
make or break your initiative.
Question 3: Can you and your
company avoid the “hidden agenda”
syndrome? Are you willing to openly
share and exchange all necessary
corporate information that supports a
Issue Sponsored by:
Miller Heiman / IMPAX
collective business development strategy
or will personal egos get in the way?
Most failures related to this question
happen because the champion did not
enroll key players in the organization to
support the program. Involving such key
players leaves no room for personal egos
to get in the way of business
development strategy.
Question 4: Is your company
willing to make the necessary
investments to train and educate your
strategic partner? You must enable your
partner to be comfortable in talking
about your organization and the
benefits of your company. Without
equipping them with the “elevator
speech”, how can you
expect them to be
THINK
at all of the right people. One of the
key components to a successful
partnership is the communication
linkage that is created between
members of both organizations. Start
communicating and keep communicating!
Question 6: The sixth question
really deals with resource commitment
and simply stated asks: Who’s in
charge? The real issue here is the
willingness of both companies to
commit the necessary internal resources
that will ultimately afford this alliance
the best chance of success. At the core
of this is accountability!
Question 7: Have you developed
the right strategic business plan to
ABOUT YOUR NEW STRATEGIC
BUSINESS ALLIANCE AS A
JOINT VENTURE. WOULD
NEWCO
OR
YOU GO TO
MARKET WITHOUT FIRST STRUCTURING A
FORMAL BUSINESS PLAN?
successful in presenting your value
proposition
to
their
clients?
Furthermore, please keep in mind that
the training and education process is
not a one-time event, but an ongoing
commitment, which must be worked
vertically within both organizations.
Question 5: Are you and your
company willing to develop an open
communication exchange with your
partner? The proper communication
and dialogue exchange must be
frequent, often, organized and directed
••16••
support the alliance or
partnership? Think about
your new strategic business
alliance as a Newco or Joint
Venture. Would you go to
market
without
first
structuring
a
formal
business plan, with mutual
goals, clear objectives,
expectations and a mission
and vision statement? As a
part of your planning
process, don’t forget to
address
the
financial
commitment and expectations.
Question 8: Are you setting up your
partnership with assigned responsibility
at various points but without individual
accountability? Responsibility without
accountability will not make the cut and
the
responsibility
within
both
organizations needs to be shared with
all of the key players.
Question 9: Where are the points of
linkage between the 2 companies? If the
answer to this question is between 1 or
2 individuals, the partnership is doomed
VELOCITY™ Q4 2002
to failure. Your initiative will experience
a total breakdown in communications
when the ownership is clearly not being
shared within the organizations.
Remember to work vertically as well as
horizontally to gain maximum traction
and optimal results. Everyone in the
organization must have an awareness of
the strategic partnership and what it
means to both companies.
Question 10: How do you avoid
the “not invented here” syndrome? This has
been the failure of many business
alliances that at the start showed
promise
and
potential.
The
typical cause of this really falls into
three camps:
1) The egos of certain individuals
with one or both companies,
2) The lack of assigned responsibility
and accountability and
3) The silo mentality and turf issues
that always seem to come up and
try to derail a good initiative!
These can all be successfully avoided
provided you follow and embrace the
rules of engagement and treat this
opportunity as a
development vehicle.
new
business
Some Final Rules of Engagement
• Market and merchandise everything
positive that you accomplish within
the alliance structure. Share with
each other and most importantly,
share with your customers. The
customer must clearly understand
the benefits of why you have joined
forces with another company. You
must be able to answer WIIFM
(What’s In It For Me?) for
your clients.
• Think about this new relationship in
a non-traditional fashion. Don’t treat
this as business as usual, for that will
not enable the alliance to reach its
true potential. Look at the new
alliance as a stand-alone entity,
develop a compelling value
proposition to support it and be sure
that the purpose and intent of this
new relationship can be clearly
understood by the client. If the
message is not uniquely different it
could cause customer blur!
• Remember, at the end of the day,
people do business with people and
the strategic partnering approach is
all about leveraging the tenured
relationships that exists within both
organizations and offering them a
better value proposition.
• Never forget that your partner is an
extension of your sales and
marketing team, so treat them as you
would another employee or associate
and finally,
• Don’t forget to celebrate your
success and have some fun along the
way! This is the fuel that keeps the
partnership growing.
As we said at the beginning of the
article, given today’s competitive
business climate, combined with the
continued downsizing of most
companies within our industries, more
and more companies are thinking about
strategic partnerships as a new and
viable business development vehicle.
While we encourage and certainly
promote this type of thinking, we are
simply suggesting that you be fully
aware of what you are getting in to, the
expectations of the process and most
importantly, the resource commitment
that must be made in order for the
alliance to be successful and make a
difference in your business.
For more information contact The Linkage Group at 513-779-3437 or visit
www.thelinkagegroup.com.
Dave Koester is President and Chief Executive Officer of the Linkage Group, LLC
and The Koester Group, LLC, both full-service consulting companies. Dave can be
reached at 513-779-3437 or [email protected].
Greg Werner is Vice President and Chief Operating Officer of The Linkage Group,
LLC. Greg can be reached at 513-779-3437 or [email protected].
IF
YOUR RELATIONSHIP WITH A NEW ALLIANCE IS NOT
UNIQUELY DIFFERENT IT COULD CAUSE CUSTOMER BLUR!
Issue Sponsored by:
Miller Heiman / IMPAX
••17••
VELOCITY™ Q4 2002